Slow but steady year in Manitoba

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This article was published 30/12/2017 (3065 days ago), so information in it may no longer be current.

A diversified economy with slow and steady growth.

That’s an accurate description of Manitoba’s economy and, chances are, it’s the way it will be described for many years to come.

The fact that 2017 was a good year for Manitoba — with growth of between 2.1 per cent and 2.9 per cent depending on which forecaster you choose — it likely won’t feel much different compared to next year, when most of them call for two per cent growth, tops.

But such reliability doesn’t mean Manitoba business stories of 2017 are void of intrigue, home runs, complaints and catastrophes.

And with the Pallister government trying out its cost-cutting religious moment, there was plenty of uncertainty.

There were also some obvious signs of growth — like the construction of True North Square and the opening of Outlet Collection Winnipeg — and plenty of shoring up of existing corporate strength, along with some corporate downsizing.

Which is to say, further evidence of a diversified economy that produces slow and steady growth.

The family empire

Old-money, family-owned businesses in Manitoba were busy this year. The Richardsons made their first foray overseas, acquiring Europe’s second largest oat miller; the MacDonalds cashed out on MacDon (after a couple of years of rumours that such a deal was imminent) for $1.2 billion; Gerry Price’s Price Industries continues to up its game in the HVAC business with Winnipeg work at the new Apple headquarters (but they can’t talk about it) and Albert Cohen’s kids are taking Gendis private.

It’s a Winnipeg thing

After suffering through an unfortunate collapse right after it was sold a few years ago, Ben Moss Jewellers stores are reopening, albeit under the stewardship of Halifax-based Charm Diamond Centres.

Wawanesa, the multi-billion dollar mutual insurance company came out of it shell, buying Western Financial Group, one of its first acquisitions in years. After being acquired by the American sports equipment company True Temper Sports, Winnipeg’s VH Footwear — the company famous for $1,000 ice skates — now has the space to make 10 times as many expensive skates.

Farmers Edge, which continues to race around the world to accumulate more paying customers for its precision farming tools, partnered with a new satellite imaging company that takes high-res pictures of farmers’ fields all day long.

A phone company to call our own

The sale of MTS to Bell did not mean dropped calls or clunky internet service. And they’ve only raised rates a little. It was fun to say we had our own little provincial telco, but it also seemed clear that the juicy dividends its stock was paying were going to be needed to invest in broadband to keep up with the wireless world Manitobans need, just like they do in Toronto.

The deal also brought Telus into the market along with all its marketing spending, and sometime next year Xplornet will assume the role of the fourth competitor that’s supposed to make the stars align in the Manitoba telco universe.

The last train to Churchill

While the good people of Churchill pursued their unique Canadian experience on the frigid shores of the Hudson Bay, just about every institution that has said they will protect rail service to the Far North town continues to let them down.

Like any business, Omnitrax wanted to make its customers happy… until it decided it had enough of those customers and wanted out of the market. Both the federal and provincial government knew for a long time that there was going to be a challenge to the service but put off developing plan B for as long as possible.

Even the northern First Nations, who want to become the new stewards of the railroad, were unable to present a united front, indulging instead in long-simmering feuds.

At least there are plenty of other northern Manitoba communities that survive without all-season ground transportation who can advise Churchillians on how it’s done.

NewFlyerpeg

If these were still the days when a town was named after its most prominent employer, New Flyer might be the company this city would try to integrate into its name.

While it has one of the largest private sector workforces — especially now that it also owns Motor Coach Industries — it’s also investing in the latest lean manufacturing technology, doing the research and development to stay ahead of the market, and making sure its long-term access to the U.S. market is secure by complying with Buy America regulations.

A couple of years ago it bought a U.S. competitor and now it makes New Flyer buses in that former company’s Alabama plant. This year, it bought a small bus maker in Indiana, a supplier in Wisconsin and is in the process of building a parts plant in Kentucky, all the while growing the size of its footprint in Winnipeg.

Diamonds (and lithium) might be miners’ best friends

There was plenty of hand-wringing going on about the North this year with the Bay Line washed out. But the fate of the mining industry may have even graver consequences.

Vale closed one of its mines in Thompson this year and will close its nickel refinery next year. Hudbay Minerals’ big mine in Flin Flon will have to shut down in the next couple of years and its much smaller Reed Lake mine is scheduled to close by the end of 2018.

In total, the industry workforce could be down by about 1,500.

It remains to be seen if 2017’s diamond discovery or major exploration for lithium (used in smartphone batteries) will materialize soon enough to fill the void.

Marijuana factory farming

Delta 9 Cannabis Inc. has dispensed with its former technical moniker (it used to be Delta 9 Biotech) and is now fully embracing the giddy heights of its potential.

One of the city’s true recent success stories — it just finished raising $23 million and its shares have more than tripled in price since going public in early November — the company is significantly expanding its hydroponic crop at its secret Transcona location.

Closer to the inner city, Bonify has invested millions of dollars for three years and is now preparing a space of up to 200,000 square feet for production.

When legal marijuana shops open next summer, it will be one other way for us to all support local business.

Downsizing, Winnipeg style

Three of the largest corporate entities in the city — Great-West Lifeco Inc., IGM Financial and Manitoba Hydro — all announced head office reductions this year.

Hydro’s was the largest at 900, and Great-West Lifeco’s about half that. While it surely meant disruptions for many, it does not seem to have caused the city’s labour market to break stride as it continued to maintain one of the lowest unemployment rates in the country.

Say what you want about Great-West Lifeco, its downsizing was done in concert with an intensification in technology investment, something absolutely necessary to maintain its standing in the global financial services business.

New digs

The first multi-tenant office building since the early ’90s is being built in downtown Winnipeg.

True North Square is adding about one million square feet of office, residential and commercial property, most of it occupying the former parking lot for a couple hundred cars.

The Portage and Main buildings were also spruced up in 2017. The exterior of the long-standing premier office address at 360 Main St. got a high-end facelift and some of its neighbours at Portage and Main also benefited from capital investment.

And, as if to show that Winnipeg is capable of bucking development trends, there were also major retail builds in 2017. The city’s first outlet store mall opened, Outlet Collection Winnipeg, with 400,000 square feet and more than 100 stores. Now if they can just find tenants for the shuttered Target and Sears locations.

The shorts got snookered

Exchange Income Corp. (EIC), a dividend-paying diversified holding company, was subjected to a nasty assault in 2017 by calculated short sellers who attempt to profit from driving down a company’s share price (by any means possible).

It didn’t work very well. While a poorly handled scheduling snafu a year ago at Perimeter Airlines — one of EIC’s companies — may have been the pretext for the spurious online slagging of the company’s safety and accounting policies, Transport Canada didn’t bite, because there were no safety issues.

The company stood its ground, resisting engagement in the underhanded tactics that included secretly recording and selectively quoting from a late night cocktail-bar conversation with one Bay Street analyst.

While the ambush did drag the stock price down 40 per cent, it’s gained back almost the same percentage since then.

martin.cash@freepress.mb.ca